The Office of Federal Housing Enterprise Oversight is trying to come up with its own estimate of possible losses Fannie Mae might face if the enterprise is forced to correct its accounting for derivatives.Fannie has estimated that would have to take a $9 billion loss if the Securities and Exchange Commission rules that OFHEO is right and Fannie's treatment of its derivative hedging activities over the past three years violates accounting rules. OFHEO Director Armando Falcon Jr. declined to comment on Fannie's $9 billion estimate in response to a question at a Women in Housing and Finance luncheon in Washington. "A lot of work still has to be done in assessing the full impact going backwards as well as going forwards," Mr. Falcon said. "We are working on that right now at OFHEO."

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